UK pledges billions for nuclear plant

The British Chancellor has announced billions in government backing for the controversial Hinkley Point nuclear station. The announcement came during a trip to China, during which he sought to court Asian investors.
British finance minister George Osborne on Monday sought to win over foreign investors, as he pledged £2 billion (2.75 billion euros, $3.11 billion) in government support for a new nuclear plant set to be built by an international consortium in southwest England.

The consortium is spearheaded by French energy company EDF, which is expected to make a final decision on whether to invest in the Hinkley Point C nuclear power station this year. The multi-billion government guarantee could help pave the way for that decision.

“The Chancellor’s approval of the infrastructure guarantee is a clear sign of the government’s commitment to Hinkley Point C,” said EDF CEO Vincent de Rivaz following Monday’s announcement.

London says the Hinkley project is key to meeting Britain’s energy needs as older coal and nuclear plants are retired. The two new reactors would generate some seven percent of the isles’ electricity.

However, the government’s nuclear bet is still far from certain. In July, Austria filed a legal complaint to the European Court of Justice against state subsidies for the Hinkley Point plant, arguing they violate EU competition laws. Meanwhile, the EDF-led consortium continues to drag its feet on the £24.5-billion plant. Just earlier this month, the French company said the Somerset station would be delayed.

Courting Asian investors

Against this backdrop, Monday signaled a slight change in strategy, with Chancellor Osborne turning his attention to the project’s Asian investors. His pledge came during a five-day trip to China meant to deepen trade ties between the two economies.

Chinese companies, which include state-run firms China General Nuclear Corporation and China Naional Nuclear Corporation, could be looking at a stake of nearly 40 percent in return for financing much of the nuclear project.

And that would just be the beginning, Osborne assured his Chinese audience at the start of an annual economic and financial dialogue.

“We very much welcome Chinese investment not just in that project but the potential for majority Chinese investment in future nuclear projects in the United Kingdom,” he said.

“There is another opportunity for Chinese investment, in high speed trail, in the north of England,” he added, without going into details.